How to Create Employee Agreements in Australia: The Guide for Startup Founders

Q: Do I need different agreements for full-time, part-time, and casual staff?

Yes, each type has different entitlements under Fair Work.

Q: What if an employee refuses to sign?

Discuss concerns openly. Without agreement, employment cannot proceed.

Rachel. M
Oct 5
6 min read

When you hire your first team member, you’re not just shaking hands—you’re stepping into a legal relationship. That relationship needs to be clear, fair, and compliant. That’s what an employee agreement does.

Employee agreements are more than documents—they’re the foundation of trust between you and your staff. Without one, you leave yourself open to disputes, compliance risks, and misunderstandings that can derail growth.

I learned this lesson after hiring a part-time marketer on a casual “let’s see how it goes” basis. We never formalised hours, leave, or termination terms. When business slowed, I was forced to reduce her shifts. She filed a Fair Work complaint. It was stressful, time-consuming, and expensive.

From then on, I created employee agreements that were detailed and compliant. Staff felt secure, I felt protected, and disputes disappeared.

employee agreements protect employer and employee — **Think of employee agreements as your insurance policy. They protect both sides if things go wrong.**

What Exactly Are Employee Agreements?

An employee agreement—often called an employment contract—is a legally binding document that outlines the terms of employment between an employer and an employee.

It sets out:

Core details: job title, duties, start date, hours, and pay.
Legal obligations: Fair Work entitlements, leave, notice periods.
Rights and responsibilities: conduct, confidentiality, compliance with policies.
Termination terms: how the relationship can end fairly.

Examples in practice:

Casual agreements: flexible hours, casual loading, no guaranteed shifts.
Part-time agreements: regular hours with pro-rata leave entitlements.
Full-time agreements: standard 38-hour work week with full benefits.

Think of employee agreements as your insurance policy. They protect both sides if things go wrong.

Why This Could Make or Break Your Business

Employee agreements matter because:

Legal compliance:

Protects you under the Fair Work Act and National Employment Standards.

Clarity for staff:

Removes confusion around pay, leave, and duties.

Risk reduction:

Prevents disputes escalating to Fair Work claims.

Professionalism:

Shows employees you’re serious about your business.

Scalability:

Having templates saves time as you grow.

Without proper agreements, you risk fines, claims, and damaged reputation.

Before You Start

Before drafting agreements, line up:

Business ABN and registered trading name.
The employee’s role description and award classification.
Pay rates that meet or exceed award minimums.
Knowledge of National Employment Standards (NES).
A template structure (DIY, lawyer-drafted, or HR software).
Plan for digital signing and record-keeping.

This prep keeps you compliant and saves stress.

How to Create Employee Agreements:

Step by Step

Step 1: Choose the Employment Type

Different contracts suit different roles.

Full-time (38 hours/week + leave entitlements).
Part-time (regular hours, pro-rata benefits).
Casual (flexible hours, casual loading, limited entitlements).

Result: You select the right structure for the role and stay compliant.

Step 2: Include Core Employment Terms

Document the essentials.

Job title and description.
Start date and location.
Work hours and flexibility.
Remuneration and superannuation.

Result: Both sides are clear on the basics from day one.

Step 3: Add Legal Requirements

Cover Fair Work obligations.

Annual, personal, and parental leave entitlements.
Overtime, penalty rates, and allowances.
Notice of termination and redundancy.
National Employment Standards minimums.

Result: Your contract holds up legally under Fair Work scrutiny.

Step 4: Cover Business Protections

Safeguard your interests.

Confidentiality and IP ownership clauses.
Conflict of interest provisions.
Code of conduct and workplace policies.
Dispute resolution process.

Mentor Tip: Keep these clauses balanced—overly restrictive terms may be unenforceable.

Result: Your business assets and culture are protected.

Step 5: Review Against Awards and Agreements

Check industry standards.

Identify applicable Modern Award.
Confirm minimum pay and conditions.
Adjust if offering above-award benefits.

Result: You avoid underpayment risks and potential fines.

Step 6: Get Legal or HR Review

Contracts are only as good as their compliance.

Engage an employment lawyer or HR consultant.
Use review services offered by HR software platforms.
Update templates as laws change.

Result: Your agreement is legally sound and founder-safe.

Step 7: Issue and Sign Agreements

Finalise with professionalism.

Provide draft to employee before start date.
Encourage them to seek independent advice.
Use e-signature platforms (DocuSign, Employment Hero).
Store signed copies securely.

Result: Both sides are protected and confident moving forward.

Common Mistakes to Avoid

Using verbal agreements only.

Result: disputes with no documentation. Fix: always use written contracts.

Copying templates blindly.

Result: missing clauses or misaligned terms. Fix: adapt for your business.

Underpaying or ignoring awards.

Result: Fair Work claims and fines. Fix: confirm with Fair Work or HR advisor.

Forgetting to update.

Result: non-compliance with law changes. Fix: review annually.

Real-World Examples

Sydney startup: Used generic templates without checking awards. They underpaid staff and faced a $30,000 backpay bill.
Brisbane consultancy: Invested in lawyer-drafted agreements early. They avoided disputes and scaled from 3 to 20 staff smoothly.

Agreements cost less than disputes.

What It Costs and How Long It Takes

Direct Costs (as of 2025/2026):

DIY templates: $0–$300.
HR software with contract tools: $10–$30 per user/month.
Lawyer-drafted agreements: $1,000–$3,000 per contract.

Timeline:

Draft with templates: 1–2 days.
Legal review: 1–2 weeks.
Full rollout: within a month.

Hidden Costs:

Risk of legal disputes if contracts are unclear.
Time spent resolving Fair Work claims.
Damage to brand reputation if staff feel misled.

Money-Saving Tip: Use HR software templates for basic roles, but get a lawyer review for leadership or specialist positions. Agreements are cheap insurance compared to disputes.

What to Do Next

➡️ Download our free Employment Agreement Template on ProDesk—designed for those ready to start building their business the right way today [ProDeck.com].

➡️ Book with Noize—visit Noize and get expert support. From contracts to compliance, we’ll make sure your agreements are bulletproof [Noize.com.au].

➡️ Grab The StartupDeck. It’s a deck of over 200 founder-tested strategies to help you make smarter decisions and accelerate growth [theStartUpDeck.com].

By acting now, you’ll protect your business and build trust with your team.

The Bottom Line

Employee agreements aren’t paperwork—they’re the backbone of your employment relationships.

Without them, you risk disputes, fines, and turnover. With them, you create clarity, protect your business, and show staff you value professionalism.

Founders who systemise agreements don’t just hire employees—they build secure, scalable teams.

FAQs

Are employee agreements legally required in Australia?

Not always, but the Fair Work Act requires minimum terms. A written contract makes compliance clear.

Do I need different agreements for full-time, part-time, and casual staff?

Yes—each has different entitlements under Fair Work.

Can I use a free template?

You can, but always review against awards and get advice for higher-risk roles.

What if an employee refuses to sign?

Talk it through. They may have concerns about clauses. Without agreement, employment can’t proceed.

How often should I update agreements?

At least annually, or whenever employment law or business policies change.

What happens if I ignore awards?

You risk fines, backpay orders, and reputational damage from Fair Work enforcement.

Mentor Tip: Use HR software templates for basic roles, but get a lawyer review for leadership or specialist positions. Agreements are cheap insurance compared to disputes.

How This Applies to Founders

If you’re a private-sector startup in most states, your employee agreements must comply with the national Fair Work Act and NES.
If you operate in WA with an unincorporated business (sole trader, partnership, some trusts), you may still fall under the WA state system.
Public sector or local government employees in some states (QLD, SA, TAS, WA, NSW) may be under a state system instead.

Key Links by State/Territory

National (covers all states/territories unless otherwise noted)

Fair Work Ombudsman — fairwork.gov.au Main regulator for employment contracts, minimum pay, leave, and termination rights.
Fair Work Commission — fwc.gov.au Independent tribunal for awards, enterprise agreements, and disputes.

New South Wales

NSW Industrial Relations — industrialrelations.nsw.gov.au Covers NSW public sector workers and provides state-specific employment guidance.

Victoria

Business Victoria – Employment Contracts — business.vic.gov.au Guidance for employers drafting compliant agreements.
Note: Victoria referred its private-sector powers to the Commonwealth; Fair Work applies to almost all employers.

Queensland

Queensland Industrial Relations Commission — qirc.qld.gov.au Manages Queensland’s state system for public sector and local government.
Private-sector employers fall under Fair Work.

Western Australia

WA Industrial Relations — commerce.wa.gov.au/labour-relations WA is unique: many small businesses (unincorporated) remain under the state system.

South Australia

South Australian Employment Tribunal (SAET) — saet.sa.gov.au Handles state-based matters (mainly public sector). Private employers = Fair Work.

Tasmania

Tasmanian Industrial Commission — tic.tas.gov.au Resolves disputes and wage matters for state public sector workers.

Australian Capital Territory

Access Canberra – Workplace Rights — accesscanberra.act.gov.au Provides resources for local compliance, but most private-sector matters = Fair Work.

Northern Territory

NT Government – Jobs and Workplace Relations — nt.gov.au Info hub for workplace rights; private employers again fall under Fair Work.